Correlation Between KLEA HOLDING and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both KLEA HOLDING and Gaztransport Technigaz at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KLEA HOLDING and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLEA HOLDING and Gaztransport Technigaz SAS, you can compare the effects of market volatilities on KLEA HOLDING and Gaztransport Technigaz and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KLEA HOLDING with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLEA HOLDING and Gaztransport Technigaz.
Diversification Opportunities for KLEA HOLDING and Gaztransport Technigaz
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KLEA and Gaztransport is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KLEA HOLDING and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and KLEA HOLDING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KLEA HOLDING are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of KLEA HOLDING i.e., KLEA HOLDING and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between KLEA HOLDING and Gaztransport Technigaz
Assuming the 90 days trading horizon KLEA HOLDING is expected to generate 0.46 times more return on investment than Gaztransport Technigaz. However, KLEA HOLDING is 2.2 times less risky than Gaztransport Technigaz. It trades about 0.12 of its potential returns per unit of risk. Gaztransport Technigaz SAS is currently generating about 0.04 per unit of risk. If you would invest 20.00 in KLEA HOLDING on November 29, 2024 and sell it today you would earn a total of 1.00 from holding KLEA HOLDING or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
KLEA HOLDING vs. Gaztransport Technigaz SAS
Performance |
| Timeline |
| KLEA HOLDING |
| Gaztransport Technigaz |
KLEA HOLDING and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLEA HOLDING and Gaztransport Technigaz
The main advantage of trading using opposite KLEA HOLDING and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLEA HOLDING position performs unexpectedly, Gaztransport Technigaz can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| KLEA HOLDING vs. Eutelsat Communications SA | KLEA HOLDING vs. ISPD Network SA | KLEA HOLDING vs. Diagnostic Medical Systems | KLEA HOLDING vs. Gaztransport Technigaz SAS |
| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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